I give you a market update that talks about both national real estate trends and what is happening in our local DC metro area market.
How is the real estate market in this pandemic?
Realtor (national) perspective on buyer attitude shifts:
43% buyers delaying process a couple of months
19% buyers stopped looking due to concern about job or job loss
12% no change
2/3 of buyers still planning to purchase
Source link to NAR Flash Survey is at bottom of this post.
Are home buyers expecting lower prices?
64% of buyers are expecting price decreases
18% yes by less than 5% price decrease
25% yes by 5-10%
7% yes by 11-15%
Now Seller Side. How has Coronavirus changed client’s attitudes to selling at home?
51% delaying the process a couple of months
17% Continuing the process but relying on virtual communications
Half of buyers are delaying, and now we see that half sellers are delaying too.
Have any of your sellers recently reduced price to attract buyers?
15% yes by less than 5%
7% yes by 5-10%
Buyers and Sellers are not on the same page on pricing.
Are closings happening on time?
35% no closing delays
33% delays due to financing
28% buyer no longer qualifies due to job loss
Unemployment claims since Mar 14
Out of 52 states and districts, DC ranked 19, MD 46, VA 43
Now let’s go from national to DC area real estate.
New Active Listings follow a seasonal pattern, so how are we doing compared to 2019?
DC new listings were up 7% at the beginning of March, now down 37% by April 19.
We are down -21.6% in DC this year compared to 2019. It could be worse — Pittsburg is down 68.5%.
Pendings are down but have reversed themselves. (* Better indicator than closings to track real time.)
Showings – First two weeks of showings in April were down 38% from last year. It is getting better – back to 70% of last year toward the end of April.
Based on unemployment data, shelter-in-place orders and how they are and are not loosening, and all other housing data, Dr. Lawrence Yun (NAR Chief Economist, also a fellow Terp) said his prediction is that real estate sales activity will finish 10-15% down for the year. We are also probably not going to see prices go down (see 2-3% price increase most likely) because of low inventory and pent up demand. (See the Brian Buffini Show for the full interview.)
Sources of Data:
Internal RLAH Brokerage presentation – May 2020 Market Pulse Update
Redfin Data Center
Assumptions: * Mar 16 is considered the starting point, first day with no school. Looking at Mid-Mar through Apr 2020.